Spadina subway extension to cost $400 million more on ‘budget reset’

TORONTO — The construction of the Spadina subway line extension from Downsview Station up to Vaughan in York Region will cost an additional $400 million to complete, according to a staff report released ahead of a TTC board meeting next week.

The report cites start-up delays, poor performance by some contractors, and design changes as reasons for the cost overrun.

City officials say the “budget reset” is necessary to ensure completion of the subway line by December 2017, which is 80 per cent complete.

The $400 million increase will be split between the City of Toronto at $240 million and The Regional Municipality of York at $160 million.

The ‘cost reset’ will cover the cost of known claim settlements, changes in the scope of the construction not yet finalized with contractors, underestimated budgets and contingency, the report states.

TTC CEO Andy Byford told reporters on Friday the money to cover the overrun will come from “some sort of contingency funding” from the city.

The TTC board had already approved a $150 million budget increase for the project last March which, in part, funded the subway extension’s new management contract with U.S. construction and engineering company Bechtel.

“I believe the action that I took in recommending to the board to bring in Bechtel has proven to be right,” Byford said.

“What I could not do is turn the clock back to completely rectify the various reasons that have led to us now asking for $400 million more.”

VIDEO: The TTC reveals new timeline and budget for already burdened transit project. Mark McAllister reports.

The estimated $2.784 billion price tag for the extension will therefore rise to $3.184 billion, the report said.

TTC Chair Josh Colle said in a release that he became aware of the delays and ballooning costs in March of last year, and that both he and Mayor John Tory expressed “outrage and concern,” calling the cost overruns “inexcusable.”

“In response, decisive action was taken. A full project reset was triggered, TTC staff were dismissed, and an outside company was brought in to manage the project and determine the amount of outstanding claims by contractors,” Colle said.

“As a result of this action, we are now learning the full extent of the claims and costs associated with the historical problems this project has faced.”

Colle added that costs increases provide a “stark reminder” as to why it was so important to “reset this project” and change the way the TTC does business.

In response, Colle said he had initiated an independent, third-party review of the entire TTC capital program, called for updates on this and other major projects at every TTC Board meeting and had taken steps to ensure that capital work is completed on time and on budget.

“Every dollar in claims is a dollar that isn’t used to improve the daily commute of the people of Toronto,” he said.

“As we continue to invest in the city’s transit system, I will remain focused on delivering projects efficiently, transparently, and with the public trust first and foremost.”

TTC board member John Campbell said his council counterparts will not be happy with the subway’s cost overruns.

“They are definitely going to be disappointed and somewhat angry … As a new city councillor, as a taxpayer in Toronto you don’t want to hear this,” Campbell said.

“It’s got to be built. It is cost shared with York Region. The transit is needed and the project has to be completed.”

The overall cost to fund the project is split between the federal and provincial government, Toronto, and York Region.

The 8.6-kilometre extension begins at Downsview Station and ends at Pioneer Village Station in Vaughan with four additional stops in between.

With files from Erica Vella.